Zynga, known for games such as FarmVille and Words with Friends, announced the acquisition along with its fourth quarter results, revealing revenue tumbled to $176.3 million from $311.1 million a year earlier. The company managed to narrow its losses to $25.2 million, from $48.5 million.

Zynga was once the darling of the gaming community thanks to its success on Facebook but the company has struggled to adapt to the shift to mobile gaming. The company's share price has fallen more than 75% since its high in early 2012.

Founder Mark Pincus last year stepped aside as chief executive of the firm, calling in Microsoft's head of Xbox Don Mattrick to help turnaround the company. As part of the turnaround plan Zynga last night announced plans to cut up to 15% of its workforce.

Mattrick said of the NaturalMotion acquisition: "We believe that bringing Zynga and NaturalMotion together is the right step at the right time.

"Our acquisition of NaturalMotion will allow us to significantly expand our creative pipeline, accelerate our mobile growth and bring next-generation technology and tools to Zynga that we believe will fast track our ability to deliver more hit games."

NaturalMotion's chief executive Torston Reil said: "When we started talking to Don and his team, it quickly became clear that they shared this vision.

"Don's background in AAA games and Zynga's expertise in social game play and large-scale game operations will be invaluable to helping us grow our existing CSR and Clumsy Ninja franchises and maximize the breakout potential of our upcoming titles."